2021 Public Annual Financial Report (PAFR)

A Message from the Village President

It is with great pleasure that the Village of Buffalo Grove presents the annual “Citizenʼs Guide to Local Financial Activities” for the fiscal year ended December 31, 2021. I take pride in the ability to deliver the residents of Buffalo Grove with an overview of the Villageʼs progress and financial performance that is both transparent and easily understood. This report is a summary of the financial activities of the Village and is not intended to replace the Annual Comprehensive Financial Report (ACFR). The full disclosure financial statements, or ACFR, can be found on the Villageʼs websiteatwww.vbg.org/financialreports.

Analysis conducted within this report outlines growth drivers, capital projects and summarized financial and trend data. The presentation of financial information in the report has been derived from audited financial statements and conforms to generally accepted accounting principles (GAAP) and related reporting standards.

The Village continues to prioritize financial transparency and open communication with its residents and businesses. I hope the information and data contained in this 2021 guide to local financial activities provides you with a snapshot of the challenges and opportunities the Village of Buffalo Groveismanagingtodayandintothefuture.

Sincerely,

BG

is...

ResponsibleResilientSafe

Budget Overview

BuffaloGrove's2021budgetisdesignedtoprovideresidentsandother interestedpartieswithaneasytonavigateformatthatclearlyexplainshow theVillageallocatesitsresources.EachprogramstrivestomakeBGmore responsible,resilientorsafe.Everyprogramconsistsofmajorservicesthe Villageprovidesforitsresidentsandthebusinesscommunity.Thebudget documentisthereforeorganizedbyareas,programsandmajorservices.The grayboxesonthefollowingpagesprovideanoverviewofeacharea.

Each program provides oversight over the services that are provided either directly to the community or indirectly as an internal support function. How resourcesareallocatedwithintheannualbudgetprovidesthereaderinsight as to what the strategic priorities are and what services are valued by Village stakeholders. The 2021 budget supports 27 programs that deliver 47 services.

Each year, the Village determines its level of service, strategic goals and expectations and staffing levels based upon the demand for services, anticipatedrevenuesandprogresstowardlong-termoperationalandcapital developmentgoals.

The Village Clerk's office maintains all of the Villageʼs official records, meeting minutes and documents as well as a range of services including businessandliquorlicensing,voterregistrationand municipalcodeupdates.

Andrew Stein

Lester Ottenheimer

David Weidenfeld

Joanne Johnson

Eric Smith

Gregory Pike

Janet Sirabian

A Closer Look at BG

TheVillageʼsnetpositionincreasedby$26.6million(or35.7percent)duringthe fiscal year ending December 31, 2021. The governmental net position increased by $17.5 million (91.1 percent) and the business-type activities net position increasedby$9.1million(16.4percent).

Equalized assessed valuation decreased by $27.9 million or 1.5 percent to $1.79 billion for the 2020 levy year (collected in 2021). The decrease is due primarilytoreductionsbythecountyduringtheCOVID-19pandemic.

BG Quick Facts

$115,951

43,212

BG is...

Responsible BGiscommittedto beingprudent stewardsofthepublic dollar.

Toachievethis commitmentthe villagetakesthe followingactions:

Where Your Property Tax Dollars Go

Did you know?

Open BG provides a hub of direct access to the Villageʼs financial, historical and contractual data. Anyone can use this data to participate in and improve government. Checkitoutatvbg.org/openbg!

Innovating the administrative, personnel, and legislative functions

Managing the Village's finances, pensions funds and debt service

Overseeing the strategic use of information technology resources

Total population in BG

2021 Top Employers and Tax Payers BG is... Resilient

BGstrivestoprovide andmaintainthe highestquality infrastructure.

Toachievethis commitmentthe villagetakesthe followingactions:

BG has a distinctive local economy with an employment baseof20,000dailyworkers.

BG has over 10 million square feet of commercial, office, and industrial space. BG is home to several advanced manufacturing centers as well as many high profile firms suchasSiemens,PlexusandYaskawa.

Local Economy

External economic factors at the national and state level continue to impact the Villageʼs revenue profile and, subsequently its ability to manageoperatingandcapitalresources.

Property tax collections totaled $16,970,657 which is a slight decrease fromthepreviousyearʼstotalof$17,035,362,adecreaseof0.4percent.

Water and Sewer collections increased from $14,625,649 in 2020 to $16,326,679in2021,atotalincreaseof11.6percent.

Salestaxes, both state shared and home rule, generated $16,013,176 in 2021versus$12,139,442in2020,anincreaseof31.9percent.

Revenue Overview

Maintainingthe village'sstreets, grounds,water, drainage,and sewersystems

Improvingthe qualityofmunicipal buildings,parking lots,andvehicles

Did you know?

Revenues for the Villageʼs governmental activities for the year ended December 31, 2021 were $59.2 million, an increase of $8.5 million or 16.8 percent. Propertytaxes continue to be the Villageʼs largest source of revenue (28.7 percent) at $17.0 million. Included within the property taxrevenuesarethepensionleviesforthePoliceandFirefighterPension Funds and IMRF/Social Security. The pension levies account for 39.5 percent of the property tax levy. Other taxes and intergovernmental revenue including sales tax, state income tax, utility tax, prepared food and beverage tax, hotel tax and real estate transfer tax total $31.5 millionor53.2percentoftotalgovernmentalactivitiesrevenue.

Directingthelong termstructural needsthrough engineering

Did you know?

MoneyGeek.com recently evaluated small cities and towns across the United States - those with 30,000 to 100,000 residents - and ranked them according to the per capita cost of crime. They ranked Buffalo Grove the #1 safest town in the U.S., with a $22 crime cost per capita.

BuffaloGrovewasrankedthe3rdBest PlacetoLiveand5thBestPlacetoRaise aFamilyinIllinoisbycommunitydata aggregator,Niche.com.Thecommunity alsoreceivedanA+rating,noting low crime rates, a diverse resident base, business growth and quality of life. Additionally, Niche.com rated Buffalo Grove as the #4 Place with the Best Public Schools in America. Schools attended by Buffalo Grove students include nationally recognized and award-winning District 125ʼs Adlai E. Stevenson High School, and Buffalo Grove High School/District 214, as well as elementary and junior highschooldistricts21,96and103.

2021 Revenue by Source Governmental Activities

Chargesforservice

Grantsandcontributions

Propertytax

Salesandusetax

Incometax

Telecommunicationtax

Utilitytax

Propertytransfertax

Othertaxes

The Clove

The Village Board approved Kensington Development Partners' plans to redevelop the22-acreTownCenterpropertyintoanew, modern entertainment and residential district called The Clove. This compact central district will feature contemporary building design, as well as upscale tenants andbeauniquedestinationforresidentsand visitorsalike.

The plan calls for a new 43,000 square foot nationally renowned grocery store with an innovative format to meet the demands of todayʼs consumers. In addition, it includes a 7-story, 297-unit high-end apartment building with 16,000 square feet of commercial space on the ground floor. Distinctive from traditional multi-family complexes,theproposed“nextgeneration”

apartmentbuildingrepresentsthelatest intheluxuryrentalmarket,wherethe focusiscreatinganamenity-rich, convenience-filledenvironment. Theplan alsoprovidesnearly20,000squarefeetof newretailandrestaurantsscattered throughoutthesite,plusan approximately0.85-acre“CentralPark”

willsitinthemiddleofthesiteandcan beprogrammedforconcerts,thearts andothercivicevents. Revitalizingtheremaining34,000square feetlocatedonthenorthernportionof thesite,creatingnewopportunitiesfor existingandfuturetenants. Groundbreakingisexpectedthisfall!

New Public Works Facility

TheVillageplanstoacquirethebuildingat1650LeiderLaneto housetheVillageʼspublicworksandengineeringservices.The new173,000squarefootfacilityprovidesenoughspaceto accommodatepublicworksoperationsnowandwellintothe future.RepurposinganexistingbuildingwillsavetheVillage approximately40%ofcostscomparedtothatofanewbuilding. TheprojectwillbefinancedwithAAA-ratedbonds,alongwith capitalfundreserves.Theremainderoftheprojectcostwillcome fromthesaleoftheexistingpublicworkspropertyandother sources,withnoadditionalcosttoBGtaxpayers.Occupancyis anticipatedinspring2024.

VIN 90 Kitchen + Bar

The bar, restaurant and patio area at The Arboretum Club have been renovated into a full-service restaurant, VIN 90 Kitchen + Bar.

Managed by WJ Golf and led by Chef Yoon Kin, VIN 90 offers a unique dining experience. The menu features a wide variety of options, including an extensive sushi selection, along with a fullservice bar. A large retractable wall creates an open-air concept betweentheindoorseatingandthepatiooverlookingthecourse.

BG is...

Safe

BG knows that the community expects to be safe in their homes, at work, and around town.

To achieve this commitment, the village takes the following actions:

Insuring the public's safety through emergency medical , fire, and police services

Inspecting the environmental and health impacts of businesses

Developing standards for the permitting and zoning of the village's built environment

Quick Facts

AffirmativeAction

RecruitingPlanhas beeninplacesince 1986andupdated every3years.

Village Pension Obligations

TheFire Pension Fund had a funded ratio of85% as of December 31, 2021. The annual interest rate assumption is 7% with a the five-year average returnis11.45%asofDecember31,2021.

The Police Pension Fund had a funded ratio of 78%as of December 31, 2021. The annual interest rate assumption is 7% with a five-year average returnof11.81%asofDecember31,2021.

72% of benefit costs are related to pension costs. $7.9 million is the Villageʼs employer obligation for current and future annuitants and $8.8 million will be distributed to retired pensioners.

Expense Overview

BiasedBased

PolicingAnnual reviewrevealedthe 20thconsecutive yearwithoutany complaintsofbiased basedprofiling.

Finance and Liabilities 2021

Adequate Reserves

TheVillagehad$22,485,209 inunassignedfundbalance availableintheGeneralFund onDecember31,2021.

Debt Reduction

TheVillageretiredatotalof $2,550,445ingeneralobligation debtinfiscalyear2021.

Officerscompletean 8-hourmentalhealth firstaidanda 40-hourcrisis interventiontraining.

The cost of all governmental activities this year was $40.6 million, a decrease of 3.8 percent from 2020 ($42.2 million). The largest decrease was made in Public Safety expenses $2.2 million in 2021. General Government expenses increased by $0.5 million (6.9 percent) and Public Works expenses increased by $0.3 million (3.9percent).

Buffalo Grove 2020 Expenditures by Function

Financial Stability

TheVillageholdsaAAA the highestpossible bondrating fromStandard&Poor'sonall currentbondedgeneral obligationdebt.

Generalgovernment

Publicsafety

Publicworks

Interest

Expenses from all business-type activities increased by $0.4 million or 3.6 percent. The Water Fund expenses increased by $0.2million,whichcomparesfavorablytoabudgetedincreasein expenses. Golf expenses were increased in 2021 to $2.6 million intotalor7.7percent.

Public Safety Pension Funding

TheFirePensionFundisfunded at85.1%,andthePolicePension Fundisfundedat77.8%. State statutemandatesthatpensions befundedat100%by2040.

The Village's financial policy requires a 25% fund balance for general operations. Learn more at www.vbg.org/financialreports

Infrastructure Modernization Program

Buffalo Grove will...

TheVillageBoardapprovedtwosignificant revenuestreamsforthispurpose,the implementationofafixedfacilityfeeand water/sewerrateincreaseforwaterandsewer mainreplacementandalocalmotorfueltax tofundroadimprovements.

The Infrastructure Modernization Program encompasses the largest initiative in the Villageʼs history to replace and rehabilitate core infrastructure assets. Due to the developmentpatternsoftheVillagesince1958,muchofthe water and sewer infrastructure as well as road deficiencies exist in the Cook County portions of the Village. However, given the desire to balance the needs of the entire village withthisinitiative,severalprojectsareplannedvillage-wide nowthrough2027.

Learn more about key IMP Projects

CambridgeontheLakeLiftStationRelocation

Forest/GlendaleStreet+Utility

Thompson+BrandywynRoadContract3

Connect with the Village and stay

In2020,theBoardapprovedabondissue totaling$24million-$14millionfor water/sewerand$10millionforstreets,to beginourinfrastructuremodernization project,withminimalimpactonthe propertytaxlevy.

MaintenanceProjects

Key IMP Project Impacts and Results

TheVillageprojectsinvestingover$50 millionintowater,sewerandstreets between2020and2023.

Totheextentpossible,projectsequencing willbearrangedsuchthatentire neighborhoodswillbecompletedwithinone tothreeyearsbasedonoutsidefundinginan efforttoreduceserviceinterruptionsand overalldisruption.

TheVillageBoardandstaffhavedevoteda greatdealoftimetodevelopingsustainable practicestoimproveandmaintainourcore infrastructure.